PwC: Fintech is Reshaping Financial Services

Banks and financial services firms must leverage the advantages of the emerging fintech ecosystem.

In a new report, PricewaterhouseCoopers (PwC) speaks with CEOs, CIOs, heads of innovation, and top management responsible for digital and technological leadership within financial institutions. The firm asks where financial services professionals think the pressure to evolve is the strongest.

For a 60% majority of respondents, their stated focus is placing fintech at the heart of their business strategy. Among CEOs fintech is an even higher priority, with 78% responding that they agreed that fintech adoption is of immense strategic importance.

Experts advise that banking customers are becoming frustrated with the delays and inefficiencies caused by legacy banking infrastructure. Banks are feeling pressure from consumers, in tandem with pressure from accelerated innovation and new technologies, as well as government regulation. The result is that banking and financial services are being reshaped from the outside in.

On the subject of strategic choices in the reshaping of financial services, blockchain and distributed ledgers are specifically named as an “untapped technology rewriting the financial services rulebook,” albeit one requiring further education for most potential adopters. Despite the steep learning curve, distributed ledger technology stands out as the most commonly cited area of interest among bankers. PwC offers their insight on the subject, calling the technology “the next evolutionary jump in business process optimization.” In that, PwC echoes Deloitte, McKinsey, and Accenture just to name a few.

The conclusions that PwC reaches sound familiar as well, as all industry talk on the evolutionary jump we face begins to sound the same. The availability of technology that can make transactions instant, cost-efficient, secure and certain means that change is inevitable. The decisions that banks make about this technology now will help companies like Ripple build a new financial infrastructure that fits the future.

“By focusing on incorporating new technologies into their own architecture, traditional financial institutions can prepare themselves to play a central role in the new financial services world in which they will operate at the centre of customer activity and maintain strong positions even as innovations alter the marketplace.

“Financial institutions should make the most of their position of trust with customers, brand recognition, access to data and knowledge of the regulatory environment to compete. Financial services players might not recognize the financial industry in the future, but they will be in the centre of it.”